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Calbee Group Financial Results
For the fiscal year ended March 31, 2015
April 1, 2014 － March 31, 2015
May 12, 2015
Copyright © CALBEE, Inc. All rights reserved.
Calbee Group’s Growth Strategies
Akira Matsumoto
Chairman of the Board & CEO
Copyright © CALBEE, Inc. All rights reserved.
Performance highlights
Growth
Margin
Net Sales
(Millions of yen)
(Millions of yen)
Return
Operating Income
Operating margin
ROE
(％)
(％)
13.7
222,150
13.1
24,183
11.4
10.9%
146,452
9.6
7.1
6.5
9,533
6.5%
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015
2
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FY2015
10 wins
５ losses
3
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Calbee’s vision
Overseas
Breakfast
Snacks
4
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Calbee is changing Japan’s breakfast
Million yen
Domestic cereal market
100,000
80,000
2014
Granola overtakes
cornflakes
60,000
40,000
2009
Granola’s rapid
growth begins
Granola
20,000
Cornflakes
5
Copyright © CALBEE, Inc. All rights reserved.
From a good company to a
strong one
6
Copyright © CALBEE, Inc. All rights reserved.
Review of fiscal year ended March 2015
Management Policy for fiscal year ending March 2016
Shuji Ito
President & COO
Copyright © CALBEE, Inc. All rights reserved.
FY2015: Overview and future plans
Outcomes
Market share
■ Domestic and North American business drove
highest ever profit ratio
1.4P↑ YoY
Potato chips incl. undisclosed PB
Av. 72.1％
・Operating income ratio: (FY2014) 9.9％→ (FY2015) 10.9％
■ Expanded overseas strategy
・Expanded North American business, started Philippine JV
with URC
■ Expanded domestic market share
0.4P↓ YoY
Potato chips
Av. 69.0％
・Grew share of potato chips and snack foods markets
・Grew share of Furugura
2014
0.5P↑ YoY
Future initiatives
Snack foods
Av. 53.8％
■ Promote overseas strategy
1.8P↑ YoY
■ Expand domestic market share
Cereal
Av. 32.7％
・Expand sales of growth products (Furugura, Jagarico,
Kata-Age Potato, etc.)
・Entry into the fabricated potato chips market
■ Achieve further cost reductions
2014
Source for share in each market: Intage SRI base on sales (nationwide, all retail formats) April 2014 – March 2015
Comparison period: Total of April 2013 - March 2014
Snack market share: Total of Calbee and Japan Frito-Lay.
Potato chips: Total of potato chips (thick- and thin-sliced), shoestring and kettle types.
Copyright © CALBEE, Inc. All rights reserved.
8
FY2015: Financial highlights
FY2014
FY2015
Change
in %
Compared
with
revised plan
Set new records in sales and income
Net sales
Net sales
Million yen
Million yen
％
％
199,941
222,150
＋ 11.1
104.3
87,209
97,561
＋ 11.9
102.9
Growth in potato and corn-based snacks,
Furugura and overseas business
Gross profit
Gross profit
SG&A
67,492
73,378
＋ 8.7
101.5
Selling
29,536
32,266
＋ 9.2
100.4
Distribution
12,644
14,425
＋ 14.1
105.6
Labor
16,880
17,872
＋ 5.9
101.9
Other
8,430
8,813
＋ 4.5
98.4
Operating
income
19,717
24,183
＋ 22.6
107.5
Ordinary
income
20,782
25,615
＋ 23.3
113.8
Gross margin up 0.3 percentage points.
Domestic: Cost reductions covered the
increase in raw material prices
on the weaker yen
Overseas: Sales expanded in high profit
margin North America
SG&A
Extraordinary
income/loss
Sales growth led to 0.7 point improvement in
SG&A expenses ratio
Selling expenses
Domestic: Allocated efficiently
Overseas: Proactive investment in North
America, etc.
Non-operating income
Foreign exchange gains: 1,318 million yen
- 246
- 1,397
ー
ー
Extraordinary loss
Net income
12,086
14,114
＋ 16.8
106.1
Impairment loss: 836 million yen
9
Copyright © CALBEE, Inc. All rights reserved.
FY2015: Factors increasing sales
■ Y-on-Y change in consolidated sales
■ Potato-based snacks
Y-on-Y Calbee consolidated sales
Potato Chips
Snack foods market growth ratio
- Kata-Age Potato: sales grew on
development of limited-time flavors and
expansion of Otona Rich sales channels
- Calbee Light! also contributed to growth
Jagarico
- Strong sales of core products
- Strong sales of Tarako Butter flavor L-size and
limited-time products
2014
Source: Intage SRI (nationwide retail sales) Basis: Sales
April 2014 to March 2015
■ Corn-based snacks
■ Y-on-Y comparison of sales by product
Million yen
Sales
Domestic
Potato-based snacks
Corn-based snacks
Cereals
Others
Overseas
North America
South Korea
＋ 22,209
＋
＋
15,560
7,564
＋
＋
＋
＋
＋
＋
3,181
4,754
60
6,648
4,662
1,650
Strong sales of popcorn
(NB, PB, Garrett Popcorn Shops)
■ Cereals
Continued strong sales of Furugura
Utilization ratio continues to exceed 100%
■ Overseas
Large increase in sales as Harvest
Snaps sold well in North America
Honey Butter Chip was big hit in
South Korea
Effect of weak yen: +2,077 million yen
10
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FY2015: Factors increasing operating income
Increase
Decrease
↑9,687
Higher
raw
material ↑1,592
costs
↓927
Million yen
Higher
selling
expenses
Higher
distribution
Higher
costs
Improved
labor
costs ↓2,729
costs
Other
24,183
↓1,781
↓991
↓383
19,717
Higher
sales
Lower raw material costs:
↑ 390
Increase in depreciation expense:
↓ 316
Loss on valuation of Calbee (Hangzhou) inventories: ↓ 197
Utilization ratio improvements, etc:
↑ 1,715
FY ended
March 2015
FY ended
March 2014
11
Copyright © CALBEE, Inc. All rights reserved.
FY2016: Full year forecasts
FY2015
results
FY2016
forecasts
Change
in %
Aiming for double-digit growth in profits
Net sales
Million yen
Million yen
222,150
240,000
＋ 8.0
Gross profit
97,561
105,600
＋ 8.2
SG&A
73,378
76,800
＋ 4.7
Net sales
％
Strengthen potato-based snacks and Furugura
Entry into the fabricated potato chips market
Overseas, growth expected in North America and
South Korea
Gross profit
Selling
32,266
34,200
＋ 6.0
Distribution
14,425
15,400
＋ 6.8
Labor
17,872
18,200
＋ 1.8
Expect increase in price of raw materials due to
weaker yen, but plan to maintain YoY gross
margin through higher sales and cost reduction
efforts
SG&A
Other
Operating
income
Non-operating
income
/expenses
Ordinary
income
8,813
9,000
＋ 2.1
24,183
28,800
＋ 19.1
1,432
- 800
ー
Plan to increase efficiency of domestic selling
expenses, proactively invest in overseas selling
expenses
Aim to improve SG&A expenses ratio by 1.0
percentage points by controlling increases in fixed
costs
Operating income ratio
12.0％ (1.1 percentage point increase YoY)
25,615
28,000
＋ 9.3
Non-operating loss
Extraordinary
income/loss
- 1,397
- 1,000
ー
Net income*
14,114
15,800
＋ 11.9
Expenses related to business commencement in
countries where we are developing new
businesses: 800 million yen
* Net income for FY 2016 represents profit attributable to owners of parent.
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12
FY2016: Factors increasing sales
■ Y-on-Y comparison of sales by product
■ Jagarico
Million yen
Sales
Domestic
＋
17,849
＋
11,286
＋
2,185
- Launching new series and strengthening
of core products
- Expect increased sales through increased factory
production efficiency
■ New snacks
Potato-based snacks
Begin selling fabricated potato chips in autumn
New products
incl. fabricated potato chips
＋
Cereals
＋
4,082
＋
6,563
＋
3,349
Overseas
North America
2,843
■ Furugura
- Increase production capacity 1.5 times in
FY2016 1H
- Enhance product line-up
■ Overseas
South Korea
＋
819
Philippines
＋
384
UK
＋
322
*Exchange rate used:
USD 1＝120 yen
KRW1＝0.1098 yen
PHP1＝2.72 yen
GBP１＝187.03 yen
North America: Expand Harvest Snaps production
capacity by 60% from FY2016 Q1
South Korea:
Enhance development of new flavors
Philippines:
Expand sales in of high value-added
Potato Chips
UK:
Begin production of Harvest
Snaps in June 2015
13
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Entry into the fabricated potato chips market
Fabricated potato chips market
Million yen
20 billion yen market
No market growth in the past few years
20,000
10,000
Calbee’s entry will energize the market
Aiming to be No. 1 in the fabricated potato
chips market
Source: Intage SRI (nationwide retail sales) Basis: Sales
Investment amount:
3,500 million yen
Of which: Buildings
700 million yen
Machinery and equipment 2,800 million yen
Production start:
Second half of FY2016
Production capacity: 6,000 million yen/year
First year sales target:
2,200 million yen
Easy to
hold
package
Original
flavor
Pleasant,
crispy
Unique
texture
14
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South Korean business
South Korean business sales
Million won
July 2011 Changed licensing agreement with
Haitai Confectionaries to JV agreement
Potato Chips
Onion Rings
Jagabee
Production by Calbee, marketing by Haitai
Others
Sept. 2014 released Honey Butter flavor
Potato Chips
Big break after trending on social media
Because production can’t keep up with demand,
will establish new factory to expand
production capacity
Investment amount:
Production start:
FY2012
FY2013
FY2014
FY2015
3,700 million yen
First half of FY 2017
Production capacity:
increase of 6,000 million yen/year
(together with existing production facilities,
12,000 million yen）
15
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FY2016: Factors increasing operating income
Increase
Decrease
↑7,839
Million yen
Higher
raw
material
costs
Higher
selling
↑2,099 expenses
Higher
distribution Higher
costs
Labor
costs
↓1,900 Improved ↓1,933
costs
Other
28,800
↓974
↓327
↓186
24,183
Higher
sales
Lower raw material costs:
Increase in depreciation expense:
Utilization ratio improvements, etc:
↑ 600
↓1,500
↑2,999
FY ended
March 2015
FY ending
March 2016
16
Copyright © CALBEE, Inc. All rights reserved.
FY2015 Consolidated balance sheet: Assets
Million yen
FY ended March
2014
Cash and
deposits
Accounts
receivable
Marketable
securities
140,966
■ Current assets ＋10,707
Accounts receivable ＋3,727
Increase on sales growth
+ 108
+ 3,727
Marketable securities ＋4,998
CP and bonds for short-term
management
+ 4,998
Inventories
+ 1,514
■ Non-current assets ＋ 10,294
Other current
assets
+ 359
Tangible assets
Intangible assets
Investments and
other assets
FY ended March
2015
- 57
Tangible assets ＋9,588
+ 9,588 •Expanded Furugura production line
•Establishment of production line for
fabricated potato chips
•Acquired plant facilities in North
+ 764
America, Indonesia, Philippines, etc.
161,968
17
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FY2015 Consolidated balance sheet: Liabilities and Net assets
Million yen
FY ended March
2014
140,966
■ Liabilities
Accounts
payable
＋ 6,667
+ 1,489
Accounts payable ＋1,489
Increase on sales growth
Other current
liabilities
+ 4,064
Other current liabilities ＋4,064
Non-current
liabilities
+ 1,113
Consumption tax payable ＋1,589
Payables related to capex, etc ＋1,425
Capital stock,
capital surplus
+ 57
■ Net assets ＋14,334
Retained
earnings
+ 10,696
Accumulated other
comprehensive income
+ 1,959
Accumulated other comprehensive
income ＋1,959
Foreign currency translation
adjustment ＋1,404
+ 1,620
Other net assets
Other net assets ＋1,620
FY ended March
2015
Minority interests ＋2,066
161,968
18
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FY2015 Consolidated cash flows
FY2015
Million yen
Cash and cash equivalents increased
by 4,987 million yen
Actual basis
*Actual basis including time deposits and CP, etc.
Million yen
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
＋ 24,217
Depreciation
＋
6,232
Increase in notes and accounts receivable-trade
ー
3,260
Income taxes paid
ー
9,301
Net cash provided by (used in) investing activities
Time deposits
＋ 22,266
ー 15,414
Purchase of fixed assets
ー 15,290
Net cash provided by (used in) financing activities
ー 2,878
Cash dividends paid
ー 3,536
Proceeds from stock issuance to minority shareholders
＋
757
4,982
Marketable securities 1,009
19
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Capex and depreciation
Million yen
Domestic maintaining investments
16,000
Domestic strategic capex
15,290
Overseas strategic capex
Depreciation
7,700
6,318
6,232
6,392
5,960
FY2014
FY2015
FY2016
Planned
Domestic:
Furugura 3,897, Fabricated potato chips 2,112
Overseas:
North America 1,805, Indonesia 978,
UK 496, Philippines 474
Main capex
in FY 2015
20
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Reference material
Copyright © CALBEE, Inc. All rights reserved.
Sales by product
Million yen
FY2014
Amount
Potato-based snacks
Potato Chips
Jagarico
Jagabee
Flour-based snacks
Corn-based snacks
Vegips , other new snacks
Domestic others
Domestic Snacks
Overseas
Snacks
Cereals
Bread
Other foods
Services
Total Sales
111,888
68,219
31,716
8,933
21,856
14,620
6,002
2,986
157,353
15,792
173,145
11,592
12,181
23,773
3,021
199,941
Composition
56.0%
34.1%
15.9%
4.5%
10.9%
7.3%
3.0%
1.5%
78.7%
7.9%
86.6%
5.8%
6.1%
11.9%
1.5%
100.0%
FY2015
Change
in %
+7.8%
+8.5%
+11.0%
-6.3%
+1.9%
+10.0%
+17.0%
+7.1%
+7.5%
+71.2%
+11.2%
+36.9%
-5.3%
+11.4%
+25.0%
+11.4%
Amount
119,452
73,051
34,223
8,763
21,972
17,801
5,675
2,726
167,628
22,441
190,069
16,346
12,483
28,830
3,250
222,150
Composition
53.8%
32.9%
15.4%
3.9%
9.9%
8.0%
2.6%
1.2%
75.5%
10.1%
85.6%
7.4%
5.6%
13.0%
1.5%
100.0%
Change
in %
+6.8%
+7.1%
+7.9%
-1.9%
+0.5%
+21.8%
-5.4%
-8.7%
+6.5%
+42.1%
+9.8%
+41.0%
+2.5%
+21.3%
+7.6%
+11.1%
22
Copyright © CALBEE, Inc. All rights reserved.
FY2015: Overseas business
■ Net sales by country
Update by country
Yen base
FY2014
North America
China
South Korea
Thailand
Hong Kong
Taiwan
Philippines
Million yen
Million yen
Million yen
Million yen
Million yen
Million yen
Million yen
5,006
2,518
2,425
2,528
2,499
814
ｰ
FY2015
Change in %
9,668
2,227
4,075
2,896
2,930
570
72
+93.1%
-11.6%
+68.1%
+14.5%
+17.3%
-30.0%
ｰ
■ North America
- Greatly increased sales and profit in North America
overall on strong sales of high profit margin Harvest
Snaps
- Large decline in sales of Ruffles® Crispy Fries
■ China
‐Decreased sales at Calbee (Hangzhou); losses continue
- CFSS sales and profit grew on strong sales of
flour-based snacks
Local currency base
FY2014
North America
China
South Korea
Thailand
Hong Kong
Taiwan
Philippines
Thousand
dollars
Thousand
renminbi
Million won
Thousand
baht
Thousand
HK dollars
Thousand
NT dollars
Thousand
peso
49,568
153,764
26,362
796,443
193,024
243,332
ｰ
FY2015
Change in %
87,043
124,971
38,585
850,691
205,789
160,817
26,536
+75.6%
-18.7%
+46.4%
+6.8%
+6.6%
-33.9%
ｰ
■ South Korea
‐Increased sales and profit on strong sales of new
Potato Chips flavor (Honey Butter Chip)
‐NewJagabee flavor going well
■ Thailand
Increased sales and profit, strong sales of Jaxx and
BunBun (pea snacks)
■ Hong Kong
Increased sales and profit on strong sales of Potato Chips
■ Operating income by country
■ Taiwan
Yen base
FY2014
North America
China
South Korea
Others
Million yen
Million yen
Million yen
Million yen
1,244
-780
6
338
FY2015
2,831
-739
220
60
Y-on-Y
+1,586
+40
+214
- 278
Decreased sales and losses due to raw materials
scandal at partner
■ Philippines
Began shipping Potato Chips and Jagabee in Feb 2015
23
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North American business
FY to March 2015
Harvest Snaps performed well, North American sales and profits grew substantially,
achieving plans
Harvest Snaps
>> Continued high utilization ratio after August production line expansion (3 lines→ 4 lines)
Ruffles® Crispy Fries >> Declined year on year and fell short of plan
FY to March 2016
Harvest Snaps >> Begin operations at new factory (Mississippi) in Q1, aim to expand sales
Jagabee
channels, area
>> Advance marketing preparations for Calbee-branded products
North American business:
Sales and operating income
Sales
Operating
income
Thousand USD
Thousand USD
Operating income
FY2014
FY2015
*Ruffles® sales for FY2015 includes sales of Calbee branded Jagabee
24
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Chinese business
FY to March 2015
Performance slump at Calbee (Hangzhou) continues
Calbee (Hangzhou)
CFSS (JV with Four Seas)
>> Sales decreased and continued to record net loss. Recorded losses on
write-down of inventory and impairment losses on non-current assets
>> Flour-based snacks strong, achieving higher sales and profit
FY to March 2016
Continue discussions on direction of Calbee (Hangzhou) with partners
Chinese business:
Sales and operating losses
CFSS:
Breakdown of sales FY2015
Thousand renminbi
200,000
Hangzhou sales
Vegetable Fries
CFSS sales
2%
Operating losses
Potato Chips
150,000
13%
Prawn Crackers
100,000
25%
50,000
Flour-based
0
Grill A Corn
60%
-50,000
FY2014
FY2015
Copyright © CALBEE, Inc. All rights reserved.
25
Domestic snack foods market
Domestic confectionery market
100 million yen
Confectionery
retail sales
3.25 trillion
trillion yen
Share of domestic
snack foods market
Chocolate 486.0 bn
カルビー
Calbee
50.4%
50.1%
Snacks 421.8 bn
ｼﾞｬﾊﾟﾝﾌﾘﾄﾚｰ
Japan
Frito-lay
2.7%
3.4%
Rice snacks 350.8 bn
Source: Intage SRI (nationwide retail sales)
Basis: Sales April 2014 to March 2015
Source: All Nippon Kashi Association
26
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Domestic cereal market
Domestic cereal market
100 million yen
Cereal production amount
42.7 billion
(26% growth rate)
Share of domestic
cereal market
Calbee
32.7%
Source: Japan Snack Cereal Foods Association
Source: Intage SRI (nationwide retail sales)
Basis: Sales April 2014 to March 2015
27
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